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The prior sections 819(a) and 813 both required a foreign
insurance company to compare its branch's actual surplus (excess
of assets over total insurance liabilities) held in the United
States to a statutory minimum surplus. Sec. 819(a)(2)(A); sec.
813(a)(1). If the branch's surplus was less than a statutory
minimum, the deficiency was treated as additional assets of the
branch which were deemed to have earned the same yield that the
branch had earned on the assets it actually held. Secs.
819(a)(1), 805(b)(2), 813(a)(3). The Deficit Reduction Act of
1984, Pub. L. 98-369, sec. 211(a), 98 Stat. 720, 743 repealed
14(...continued)
the amount determined by multiplying the taxpayer's
total insurance liabilities on United States business
by a percentage for the taxable year determined and
proclaimed by the Secretary under subparagraph (B).
(B) Determination of percentage.--The percentage
determined and proclaimed by the Secretary under this
subparagraph shall be based on such data with respect to
domestic life insurance companies for the preceding taxable
year as the Secretary considers representative. Such
percentage shall be computed on the basis of a ratio the
numerator of which is the excess of the assets over the
total insurance liabilities, and the denominator of which is
the total insurance liabilities.
(3) Current investment yield.--For purposes of this
subsection--
(A) In general.--The term "current investment
yield" means the percent obtained by dividing--
(i) the net investment income on assets held in
the United States, by
(ii) the mean of the assets held in the United
States during the taxable year.
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